Starbucks' New Logo Bleak, Readers Say

SEATTLE ( TheStreet) -- Starbucks ( SBUX) unveiled a new logo on Jan. 5, but readers of TheStreet don't think it was a good move for the coffee chain behemoth.

In a video posted on its Web site last Wednesday, Starbucks CEO Howard Schultz talked about the symmetry of updating its emblematic logo on the 40th anniversary of the company in March.

Starbucks' revised, streamlined logo removes the outer green circle that bares the Starbucks Coffee name, enlarging the inner siren, sometimes referred to as a sea nymph, in the company's signature green hue.

Schultz said "this new evolution of the logo does two things that are very important; it embraces and respects our heritage and at the same time evolves us to a point where we feel it's more suitable to the future." The CEO pointed out that the original Starbucks logo was brown, but was changed to green in 1987. It has gone through two other small changes since then. But now "the world has changed and Starbucks has changed," he said.

"The new interpretation of the logo at its core is the exact same essence of the Starbucks experience. And that is the love we have for our coffee, the relationship we have with our partners and the connection we build with our customers. What I think we've done is we've allowed her to come out of the circle in a way that I think gives us the freedom and flexibility to think beyond coffee. But make no mistake. We have been, we will continue to be, and we always will be the world's leading purveyor of the highest quality coffee."

We polled our readers to see if they thought the new wordless logo was sleek, proving Starbucks is a truly international powerhouse, or if they thought it bleak, likely to annoy loyal customers and fail to lure new ones.

Readers overwhelmingly agreed that Starbucks' new logo is bleak.

Out of more than 1,351 votes, a total of 73%, or 986 voters, said they didn't think the new logo was a good move for Starbucks. Just 27%, or 365, of the votes thought it a sleek new design underscoring Starbucks' iconic placement on the global mindscape.

TheStreet's poll sparked a heated debate among readers, highlighting that no matter how people feel about its logo, Starbucks is a brand that brings out the passion in its customers and market watchers.

Douglas Deeds, who calls himself a long-term investor, said "I think this is as big a mistake as New Coke."

Tootiez69 agreed, asking "Why is it that when something is REALLY good the upper management has to overthink things and start making changes?"

Some argued that Starbucks would have been better off removing the word 'coffee' from its logo, but leaving the Starbucks name.

Dfdfjj said a nameless logo reminded him of the artist formerly known as The Artist Formerly Known as Prince.

Charlie, a reader who says he lives in Japan, mentioned the existence of numerous Starbucks coffee shop copycats in Japan -- non-Starbucks coffee shops that use a similar green rounded logo to bring in customers. "While I know the change didn't come because of the knock offs, it seems that having such imitators is a sign of success," Charlie wrote. "Why change the standard that everyone else is trying to copy?"

On the counter side of the debate, TRISHSLUDER said "we know their name by now so they do not have to be redundant" by putting the word Starbucks on its logo.

Sbuxbrand thought the new logo was the right decision from a branding perspective. "They needed to separate themselves from being just a coffee shop so they could add additional products to their offering," the reader wrote, cautioning that "they need to be careful about diluting their brand by trying to be everything to everyone."

Perhaps Squib Kick was the most pragmatic: "Get over yourselves. The logo is almost the exact same except without text. What's the big deal? I think it is sleeker and softer at the same time. If it allows for easier expansion in the Asian markets where growth is most likely, go for it.... It's the product inside and the people who make it that count."

Removing the word coffee from its logo is "an important step," Michael A. Yoshikami, president and chief investment strategist at YCMNET Advisors, told TheStreet.

"Starbucks knows that future growth will be in leveraging their brand into other products and markets," he added. "Eliminating the word coffee helps the brand be more flexible in terms of products associated with the company."

"I think it's nuts," James Gregory, chief executive of brand consulting firm CoreBrand, told Reuters. "What's it going to be -- the coffee formerly known as Starbucks?"

Gregory said the nameless logo is likely to hurt Starbucks the most in terms of the products it sells in supermarkets and other retail locations. "There you're dealing with people who aren't enthusiasts. You're looking at something that's almost generic, and it's not shouting out as something that is Starbucks."

Writing on the Harvard Business Review Web site, Nigel Hollis, chief global analyst at brand research consultancy Millward Brown, wrote that, "if the name "Starbucks" is so strongly associated with coffee that you have to remove the name in order to launch another product, does that not suggest that the corporate strategy is out of sync with customer understanding?"

Starbucks said its brand is so ubiquitous it no longer needs to display its name around the logo in order for customers to recognize it, calling to mind other easily recognizable brand logos like those of Nike ( NKE) and Apple ( AAPL). A logo without words also reflects Starbucks' expansion plans in China and other international markets, it said.

Just last week Starbucks announced a partnership with India's Tata Coffee to procure, roast and sell coffee in India.

HBR's Hollis pointed out, however, that Apple removed the word "computers" from its company title only after it had established its reach beyond the PC with products like the iPod, iPhone and AppleTV. Starbucks, he argued, "is dropping the word coffee in anticipation of venturing into new territory."

A Rice University study on consumer reaction to logos showed that Starbucks' new logo could prove beneficial in the long run as it expands in Asian markets.

Vikas Mittal, a Rice professor of marketing and co-author of two studies on customers, logos and brand commitment, found that rounded logos are widely accepted in Asian countries such as India and China where interdependency and collectivism are cultural norms, as opposed to Western cultures which tend toward independency and individualism.

The professor said that while some loyal U.S. customers may feel alienated, Starbucks' new logo could drive new loyalties in strong emerging markets like China, India, Taiwan and Singapore.

Perhaps discount retailer Target ( TGT) already knew that to be true.

Recently, with no fanfare or press release to go along with it, Target, which already had a rounded logo, removed the word Target from its iconic bulls eye -- though it uses its older, worded logo and new, wordless logo interchangeably.

Mittal and his co-authors also found that negative consumer reaction to logo changes are strongest among a brand's most committed customers.

"It is important for companies to refresh their logos, but the process of doing so must be carefully managed," Mittal said. "Our research shows that companies need to carefully consult customers -- whether through Internet sites or chat rooms -- to ensure that customers feel they have been heard in the redesign and repositioning process. That will ensure that highly committed customers -- who are also often the heaviest consumers of the brand -- feel connected to the brand."

The professor said that while some loyal U.S. customers may feel alienated, Starbucks' new logo could drive new loyalties in strong emerging markets like China, India, Taiwan and Singapore.

That bodes well for Starbucks, which recently announced plans to grow its presence in China by 40% this year, opening 200 new stores in the country over the next three years.

Ways in which Starbucks has been expanding beyond its signature coffee are through the marketing of Seattle's Best Coffee products and through its Via Ready Brew product line, instant coffee served in preportioned single-serve packets. The coffee shop chain also offers customers artisan breakfast sandwiches, along with other food items such as cookies, pastries and other snack foods. For years it has sold coffee paraphernalia such as coffee mugs, tumblers and hot drink holders, as well as CD compilations of music played in its stores.

"Even though we have been, and always will be, a coffee company and retailer, it's possible we'll have other products with our name on it and no coffee in it," Schultz said on a Webcast.

Still, Starbucks knows not all corporate redesigns come about smoothly.

Just a week after a clandestine unveiling of a new logo on its Web site, Gap ( GPS) announced in October it was backing off its infamous new design.

Gap
The Gap's old logo is at left; the logo it adopted and abandoned in the face of massive scorn is at right.

PepsiCo ( PEP) had a similar blunder when it redesigned the packaging of its Tropicana Pure Premium orange juice cartons. The lackluster redesign elicited private-label or generic supermarket-brand juice containers, not the iconic and well-loved Tropicana most consumers knew and loved.

In February 2009, Pepsi executives admitted defeat and said it would bring back the look consumers really wanted -- the classic orange with a red-and-white-striped straw poking out.

Pepsi's SunChips brand even had to abandon its progressive, fully compostable bag, released last year, because consumers complained the bags were too noisy.

Harvard Business School professor Nancy Koehn wrote that, "what I am certain of is that Starbucks and its CEO, Howard Schultz, have a history of breaking new ground with the company's brand, and that one of the core attributes of this brand is customer engagement. Seen from these two vantage points, I'm betting that Starbucks will come out a winner with this move."

Writing in the Harvard Business Review, Koehn said Starbucks spent decades creating what is known as the Starbucks experience, "and this engagement helps us understand the passions aroused in the current debate about the logo. Whatever your opinion about Starbucks and its new logo, you are not likely to be indifferent or blasé."

-- Written by Miriam Marcus Reimer in New York.

>To contact the writer of this article, click here: Miriam Reimer.

>To follow the writer on Twitter, go to http://twitter.com/miriamsmarket.

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